LISBON, Dec 20: There is no risk of deflation, the fall in prices over an extended period, in Germany “for the moment”, European Central Bank vice-president Eugenio Domingo Solans said in an interview published in Portugal on Friday.

“For now there does not seem to exist any risk of deflation in Germany,” he told business daily Diario Economico.

He added there “was no risk to price stability in the medium term” in 12-nation euro-zone.

His comments came as a number of key German states released preliminary inflation data for December on Friday which indicate price developments across Germany as a whole looked set to remain stable once again.

Domingo Solans added economic growth in the euro zone would pick up speed in 2003.

“Economic growth should strengthen throughout next year, starting from lower rates of growth at the beginning of 2003 to higher levels,” he said.

But he cautioned the economic recovery could be jeopardised if unexpected world developments lead to fluctuations in oil prices.

Domingo Solans said impact of a US-led war on Iraq on the economy would depend on “how it happens, at what time, for how long and whether or not the conflict spreads.”—AFP